The impact of UK tax and double tax treaties on those leaving or entering the UK as well as investors in and outside the UK
The course will cover the treatment of those coming into the UK and those leaving the UK. The past five years have seen more changes to the taxation of internationally mobile persons than has occurred in the past 200 years. The introduction of a statutory residence test and the changes to domicile as well as the European Social Security agreement, overseas workday relief and the abolition of ordinary residence has created both new opportunities and pitfalls for those who move in or outside the UK, as well as those investing in it. In addition the enhanced exchange of information cooperation between tax authorities means that the net is closing in on those who seek to evade taxes as well as more innocent parties.
Moreover, the Government has made clear its determination to tax non-residents on the gains from residential property and is introducing CGT for non-resident on UK property with effect from 6 April 2015. This comes on top of the ATED charge and the additional charge for non-natural persons. Given the size of the deficit, these pressures are unlikely to abate soon.
The course first examines the impact of UK domestic tax law on those entering and leaving the UK.
The course will start by looking at increasing reach of UK taxation for those who are not resident in the UK, and may be dual resident. As the previously generous exemptions for capital gains tax for non-residents have been eroded, we will look at the position of non-UK resident investors and those who are trading the United Kingdom.
For those who are arriving in the UK, one will look at the point at which taxation starts and ends and the potential reliefs which are available for those who are temporarily seconded to the UK. This will include an examination of the detached duty relief rules. We will examine the residence rules to see at what point an individual becomes resident in the UK and the potential opportunities and risks, which the new statutory residence tests impose on those who come to the UK.
The course will also examine the recent changes to domicile and the opportunities which still remain for those who are non-UK domiciled as well as the impact of the substantial increase in the UK personal allowance.
The course will then cover the issues and opportunities which taxation treaties give to both individuals and companies. It will also look at the potential Social Security (NIC) savings that arise from the use of Social Security agreements.
Finally in this section, the course will look at the compliance obligations, tax return and information requirements which are imposed by both the UK and overseas authorities.
What income can be excluded from tax returns and when you can claim UK personal allowances?
The second section will look at the position of those who are leaving the UK and the domestic law considerations. These will cover the change of status to non-residents and its implications, residual tax liabilities for those who leave the UK and their compliance obligations, including filing tax returns. It will also cover the Social Security position of those who are seconded abroad.
The course will look at the operation of double tax agreements and their effects on overseas income which is derived by a resident in the UK. This will include understanding how double tax treaties affect overseas tax relief on overseas income, using DTR or ‘by deduction’, 10% deductions on overseas pensions, how residence and domicile affect UK tax, how residence is decided and how tax treaties impact on this.
Finally one needs to look at HMRC activity in this area and the recent case law developments.
- The long arm of the taxman—taxing non-residents on income and gains
- Residence– the new Statutory Residence Test
- The new domicile regime
- Reliefs-Overseas Workdays and Detached Duty relief
- Leaving the UK—shaking off UK residence
- Post residence taxation on income and gains
- Who should use Double Tax Treaties and when?
- Interpreting Double Taxation Treaties
- Social Security agreements and NIC
- Compliance – when do returns need to be filed and tax withheld?
- Anti-avoidance developments
- Double Tax Treaties and Employment Income
- Double Tax Treaties and Pensions
- HMRC activity
- Recent case law
- OECD BEPs Report
- Illustrative case study